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Patel v. Patel

Court of Appeals of Michigan

June 19, 2018

SHAMBHU PATEL, Plaintiff-Appellant,
v.
HEMANT PATEL, JAIMIN PATEL, a/k/a JIMMY PATEL, and VISHNU SHREE II, INC., Defendants-Appellees.

          Ottawa Circuit Court LC No. 16-004469-CB

          Before: Murray, C.J., and Markey and Tukel, JJ.

          PER CURIAM.

         Plaintiff Shambhu ("Sam") Patel, and his two brothers, defendants Hemant ("La La") Patel and Jaimin ("Jimmy") Patel, in 2001, incorporated defendant Shree Vishnu II (SVII), to purchase and operate a hotel in Holland, Michigan known as the Holland Econolodge or the Holland Economy Inn.[1] Sam brought a shareholder oppression suit against defendants in 2016. Among the defenses that defendants asserted were waiver and promissory estoppel based on a handwritten letter plaintiff wrote on June 17, 2006; defendants allege that plaintiff in the letter surrendered all of his interest in the hotel to his two brothers. After a bench trial on the issue of waiver, the trial court ruled in defendants' favor in an opinion and order of July 28, 2017. The trial court entered its judgment of no cause of action on August 18, 2017. Plaintiff appeals by right. He also appeals the trial court's award of mediation fees as taxable costs. We affirm.

         I. WAIVER

         A. STANDARD OF REVIEW

         This Court reviews for clear error the trial court's factual findings following a bench trial and reviews de novo the trial court's conclusions of law. Ligon v Detroit, 276 Mich.App. 120, 124; 739 N.W.2d 900 (2007). "A finding is clearly erroneous where, although there is evidence to support the finding, the reviewing court on the entire record is left with the definite and firm conviction that a mistake has been made." Ambs v Kalamazoo Co Rd Comm, 255 Mich.App. 637, 651; 662 N.W.2d 424 (2003). On appellate review, this Court must accord deference to the trial court's superior ability to judge the credibility of the witnesses who appear before it. Id. at 652; MCR 2.613(C).

         A waiver consists of the intentional relinquishment or abandonment of a known right. Sweebe v Sweebe, 474 Mich. 151, 156-157; 712 N.W.2d 708 (2005). "Waiver is a mixed question of law and fact. The definition of a waiver is a question of law, but whether the facts of a particular case constitute a waiver is a question of fact." Id. at 154 (citation omitted). "The party asserting the waiver bears the burden of proof." The Cadle Co v City of Kentwood, 285 Mich.App. 240, 255; 776 N.W.2d 145 (2009). Magic words are unnecessary to effectuate a valid waiver, but a waiver must be explicit, voluntary, and made in good faith. Sweebe, 474 Mich. at 157. In order to ascertain whether a waiver exists, a court must determine if a reasonable person would have understood that he or she was waiving the interest in question. Id.; Reed Estate v Reed, 293 Mich.App. 168, 176; 810 N.W.2d 284 (2011). Thus, a valid waiver may be shown by "express declarations or by declarations that manifest the parties' intent and purpose, " Sweebe, 474 Mich. at 157, or be an implied waiver, "evidenced by a party's decisive, unequivocal conduct reasonably inferring the intent to waive." Reed Estate, 293 Mich.App. at 177 (citation omitted).

         B. ANALYSIS

         We conclude that the trial court did not clearly err by finding "plaintiff intentionally and voluntarily relinquished his known right to an ownership interest in the corporation owning the Holland hotel" by writing and delivering to his two brothers the June 17, 2006 letter that "explicitly indicated that [plaintiff] did not want 'anything' or 'whatever' from the Holland hotel, " and that defendants Hemant Patel and Jaimin Patel "should 'share' or 'split' what would come from the hotel . . . ." The trial court's finding is supported by the plain meaning of the words that plaintiff voluntarily wrote in the letter addressed to his two brothers. The three brothers' conduct after 2006, which showed that plaintiff never participated in hotel operations and did not provide any assistance to save the hotel from bank foreclosure (2013) or from being shut down by the city of Holland because of alleged ordinance violations (2014), also supports the trial court's finding. Consequently, the trial court did not clearly err by ruling that because plaintiff "waived his rights as a shareholder in 2006, he did not have standing to pursue claims for damages, accounting, or dissolution of SVII in 2016." We affirm the trial court's judgment dismissing plaintiff's shareholder action.

         Plaintiff asserts that the trial court's findings were against the great weight of the evidence. Plaintiff, while professing not to quarrel with the trial court's findings of fact, argues that the trial court erred by concluding defendants satisfied their burden of proof by the preponderance of the evidence that plaintiff waived his interest in the Holland hotel by writing and delivering the June 17, 2006 letter. See The Cadle Co, 285 Mich.App. at 255 ("The party asserting the waiver bears the burden of proof."). But plaintiff does attack certain of the trial court's individual findings of fact and also attacks the trial court's ultimate finding of fact of a valid waiver. Sweebe, 474 Mich. at 154 ("[W]hether the facts of a particular case constitute a waiver is a question of fact."). Ultimately, we conclude that the trial court's findings are not clearly erroneous because the evidence supports them, and where testimony conflicts, we must accord deference to the trial court's superior ability to judge the credibility of the witnesses who appear before it. Ambs, 255 Mich.App. at 652; MCR 2.613(C).

         Plaintiff argues that the plain meaning of the words he wrote should not be applied because he only intended to comfort the brothers' father by showing there was not a family feud over money and delivered the letter to his father, not his brothers. But plaintiff's testimony in this regard was contradicted by the testimony of his brothers. The trial court found defendants' testimony on this point more credible than plaintiff's testimony. Moreover, the trial court's finding was supported by the fact that the letter was addressed to plaintiff's brothers (Jimmy, La La). The finding was further supported by the lack of evidence that the June 17, 2006 letter was ever in the possession of the brothers' father, other than plaintiff's own testimony that the trial court determined lacked credibility. The trial court's findings that plaintiff delivered the letter to his brothers and intended the plain meaning of the words he wrote are not clearly erroneous. MCR 2.613(C); Ambs, 255 Mich.App. at 652.

         Plaintiff's other arguments also lack merit because they do not undermine the trial court's factual findings. Plaintiff argues the "fact" that he remains personally liable for the Holland hotel's debt undercuts the trial court's finding. But plaintiff points to no part of the record where this "fact" is established. Rather, the record evidence shows that in 2013, the Holland hotel's bank called its outstanding loan balance and defendants refinanced the debt without plaintiff's assistance or participation. Whether plaintiff remains liable regarding any personal guarantees he gave before 2006 is pure speculation. Plaintiff's argument does not undermine the trial court's factual findings that "plaintiff intentionally and voluntarily relinquished his known right to an ownership interest in the corporation owning the Holland hotel" by writing and delivering to his two brothers the June 17, 2006 letter.

         Similarly, plaintiff's argument-that the Hindu phrase "Oh Namoh Shivay" would not be written at the top of the June 2006 letter if it were a business document-also does not undermine the trial court's factual findings. The evidence at trial showed all three brothers did not attend to legal details as a lawyer or accountant would. Further, the letter was written after plaintiff had accused his brothers of stealing money from SVII. Immediately before writing that he did not want anything from the hotel, plaintiff wrote: "I don't have any hard feeling. If I did something wrong I am sorry." Plaintiff testified at trial that the phrase at issue had religious implications similar to invoking Deity so its placement on a letter to brothers with whom he was in business, to ...


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